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In re Intramta Switched Access Charges Litigation

United States District Court, N.D. Texas, Dallas Division

March 22, 2017

IN RE INTRAMTA SWITCHED ACCESS CHARGES LITIGATION THIS DOCUMENT RELATES TO CIVIL ACTION NOS. 3:16-CV-0974-D, 3:16-CV-0975-D, 3:16-CV-0977-D, 3:16-CV-0979-D, 3:16-CV-0988-D, 3:16-CV-0989-D, 3:16-CV-0990-D, 3:16-CV-1010-D, 3:16-CV-1105-D, 3:16-CV-1119-D, 3:16-CV-1122-D, 3:16-CV-1123-D, 3:16-CV-1126-D, 3:16-CV-1443-D, 3:16-CV-1605-D, 3:16-CV-1626-D, 3:16-CV-1893-D, 3:16-CV-1980-D, 3:16-CV-1985-D, 3:16-CV-2210-D, 3:16-CV-2722-D, 4:16-CV-0302-D. MDL No. 2587

          MEMORANDUM OPINION AND ORDER

          SIDNEY A. FITZWATER, UNITED STATES DISTRICT JUDGE

         In a prior opinion in these MDL proceedings-In re IntraMTA Switched Access Charges Litigation, 2015 WL 7252948 (N.D. Tex. Nov. 17, 2015) (Fitzwater, J.) (“IntraMTA I”)-the court addressed the question whether local exchange carriers (“LECs”) can charge interexchange carriers (“IXCs”) access fees for access services that the LECs provide the IXCs to enable them to exchange interstate wireless intraMTA calls-that is, interstate wireless calls that originate and terminate within the same Major Trading Area (“MTA”).

         In IntraMTA I the IXCs were the plaintiffs and the LECs were the defendants. The Fed.R.Civ.P. 12(b)(6) motions to dismiss in the instant tag-along actions present the same principal question as in IntraMTA I, although the LECs are aligned as plaintiffs and the IXCs are aligned as defendants, and the IXCs rely on arguments not raised in IntraMTA I. Because the court concludes that the LECs have pleaded plausible claims on which relief can be granted, it denies the motions to dismiss.

         I

         The court assumes that the parties are familiar with its opinion in IntraMTA I and will add to its recitation of the background facts and procedural history what is necessary to understand the present decision. Plaintiffs in these cases[1] are LECs that are suing defendants Level 3 Communications, LLC and its affiliates (collectively, “Level 3”)[2] in their capacities as IXCs.[3] The LECs allege that Level 3 ordered and used their interstate and intrastate tariffed access services to exchange calls between Level 3's long distance network and the LECs's local networks; that the LECs have timely rendered bills setting forth the charges required by the LECs's state and federal tariffs for the access services; and that, since early 2014, Level 3 has withheld payment of interstate and intrastate access charges for wireless (also known as “Commercial Mobile Radio Service” or “CMRS”) intraMTA calls, which Level 3 contends by law are not subject to access charges. The LECs assert claims for breach of federal and state tariffs, and they seek a declaratory judgment that Level 3 is obligated to pay access charges for exchanging intraMTA calls between Level 3's longdistance network and the LECs's local telephone networks.[4]In IntraMTA I the court held, in pertinent part:

Under 47 U.S.C. § 251(g), the proper methodology for determining whether LECs can charge IXCs for the access services at issue [(i.e., access services for interstate wireless intraMTA calls)] is to identify the baseline practice on the date immediately preceding February 8, 1996 and then determine whether the [Federal Communications Commission (“FCC”)] by regulation has explicitly superseded that practice. Defendants have established that the FCC has not yet explicitly superseded the baseline compensation practices that applied on the date immediately preceding February 8, 1996 to the access services that LECs provide IXCs to enable them to exchange interstate wireless intraMTA calls. And plaintiffs have failed to show otherwise.

IntraMTA I, 2015 WL 7252948, at *11.

         Level 3 now moves under Rule 12(b)(6) to dismiss the LECs's actions for failure to state a claim on which relief can be granted. In support of its motions, it relies on the following grounds: first, it adopts the arguments that Sprint Communications Company L.P. (“Sprint”) and MCI Communications Services, Inc. / Verizon Select Services Inc. (“Verizon”)-the IXCs in IntraMTA I-presented in IntraMTA I to argue that IXCs are not obligated to pay access fees to LECs for access services that the LECs provide the IXCs to enable them to exchange interstate wireless intraMTA calls; second, Level 3 contends that the LECs have failed to plead that Level 3 is an IXC; third, Level 3 maintains that, under 47 U.S.C. § 251(g)-a provision of the Telecommunications Act of 1996 (the “Telecommunications Act” or the “Act”)-access charges apply only to long distance communications, and therefore do not apply to intraMTA wireless calls, which are defined by an order of the FCC as local calls; and, fourth, Level 3 posits that, under the regulatory scheme established by Congress and the FCC, the same call cannot simultaneously be subject to access charges and reciprocal compensation. The LECs oppose Level 3's motions. The court has heard oral argument.

         II

         Under Rule 12(b)(6), the court evaluates the pleadings by “accept[ing] ‘all well-pleaded facts as true, viewing them in the light most favorable to the plaintiff.'” In re Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th Cir. 2007) (quoting Martin K. Eby Constr. Co. v. Dall. Area Rapid Transit, 369 F.3d 464, 467 (5th Cir. 2004)). To survive Level 3's motions, the LECs's complaints must allege enough facts “to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A claim has facial plausibility when the plaintiff[s] plead[ ] factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “The plausibility standard is not akin to a ‘probability requirement, ' but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id.; see also Twombly, 550 U.S. at 555 (“Factual allegations must be enough to raise a right to relief above the speculative level[.]”). “[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not ‘shown'-‘that the pleader is entitled to relief.'” Iqbal, 556 U.S. at 679 (brackets omitted) (quoting Rule 8(a)(2)). Furthermore, under Rule 8(a)(2), a pleading must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Although “the pleading standard Rule 8 announces does not require ‘detailed factual allegations, '” it demands more than “‘labels and conclusions.'” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 555). And “‘a formulaic recitation of the elements of a cause of action will not do.'” Id. (quoting Twombly, 550 U.S. at 555).

         III

         Level 3 relies first on the arguments that Sprint and Verizon made in their opposition to the LECs's motions to dismiss addressed in IntraMTA I. The court denies this ground of Level 3's motion for the reasons explained in IntraMTA I.

         IV

         At the conclusion of Level 3's adoption of Sprint's and Verizon's arguments, it advances an argument that the court will treat as the second ground of its motions to dismiss: that even if there is an “IXC exception” to the reciprocal compensation requirement of 47 U.S.C. § 251(b)(5), [5] the LECs have not established the contours of the exception, have not pleaded facts showing what category Level 3 falls into, or even what distinguishes IXCs from other intermediate carriers, and have not alleged that Level 3 delivers intraMTA traffic in its capacity as an IXC as opposed to some other type of intermediate carrier. The court concludes that Level 3 is not entitled to dismissal on this basis.

         The LECs have plausibly pleaded that Level 3 is an IXC. See, e.g., Compl. ¶ 98 (“Level 3 is an IXC. Level 3 ordered and used the [LECs's] interstate and intrastate tariffed access services to exchange calls between Level 3's long-distance network and the [LECs's] local networks.”). To the extent Level 3 contends, “as a legal matter, ” that it cannot be an IXC, it has failed to cite controlling authority for this position. ...


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